The Eastern Company (EML) Q3 2024 earnings summary

Executive summary

• Net sales for Q3 2024 increased 15% year-over-year to $71.3 million, driven by strong demand for returnable packaging and truck-related products.

• Net income from continuing operations for Q3 2024 was $4.7 million ($0.75 per diluted share), up from $3.5 million ($0.55 per share) last year.

• The Big 3 Mold business was classified as discontinued operations and held for sale, resulting in a significant write-down and net loss.

• Ryan Schroeder was appointed CEO, bringing manufacturing and leadership experience, effective November 6, 2024.

Financial highlights

• Gross margin improved to 25.5% in Q3 2024 from 24.9% in Q3 2023.

• Adjusted EBITDA from continuing operations increased to $8.7 million in Q3 2024 from $6.7 million in Q3 2023.

• Backlog as of September 28, 2024, rose 13% year-over-year to $97.2 million.

• Net loss for Q3 2024 was primarily due to discontinued operations, with a write-down of the Big 3 Mold business.

• Net income from continuing operations for the first nine months of 2024 was $11.7 million, up from $7.8 million year-over-year.

Outlook and guidance

• Management expects cash, operating cash flow, and available credit to be sufficient for foreseeable working capital needs.

• The company anticipates continued value creation and solid performance in Q4 2024 and beyond, supported by its “One Eastern” strategy and dual-sourcing trends.